Barron’s List of the Top 100 Hoarders
We spent a decade recruiting women. We never asked who would end up owning these independent financial advisors.
Barron’s published its annual ranking of America’s top 100 RIA firms, independent financial advisors, this Sunday to “shine a spotlight on the nation’s best financial advisors, with an eye toward raising standards in the industry.” Fancy language aside, Barron’s acknowledges that the list is really based primarily on “assets managed, growth, technology spending, and succession planning.” The “best” just seems to mean the biggest. The nine mega RIAs at the top each manage over $120 billion, and each staffs more than 1,000 people. Even the “non-mega” firms are gigantic and growing—the smallest on the list has over a billion dollars under management.
At some point in our lives, we’ve all binge watched Hoarders, and know that every episode ends with someone finding a long lost pet under a pile of yellowed newspapers.
Hoarding for the sake of hoarding, whether its spoons, gnomes, clothes, or billions of wealthy clients’ dollars, doesn’t end well for anyone.
But Barron’s Top RIA list seems to be rewarding exactly that: hoarding. It is rewarding firms which have amassed the biggest amount of client money under their umbrella, through any means possible. It is, at the end of the day, just a Top 100 List of Hoarders.
I can tell you what it is not.
It is not a celebration of women’s advancement to the highest echelons of our industry.
Barron’s names up to three top executives per firm. Across the Top 100 it names 283 executives, and only 47 of them are women, or 16.6%. Sixty-two of the 100 firms do not name a single woman. Of those that do, only 7 name a woman first, which is usually where the chief executive sits. The 9 mega RIAs are worse: only 3 of their 25 named executives are women, and none is listed first.
But wait! The CFP Board has announced the most diverse certificant class in its history in each of 2023, 2024, and 2025! So what accounts for the lack of women in Barron’s Top?
First, Barron’s moved away from considering diversity and more towards pure size for this year’s list: The 2023 edition of this same list scored firms on “assets managed by the firms, technology spending, staff diversity, succession planning and other metrics.” The 2026 edition swaps in growth and drops staff diversity entirely.
Turns out this has a big impact on the ranking outcomes:
The drop in women at the top, consistent with the drop in consideration for diversity suggests that women do less well when size is all that matters. But, we know women are still entering the field and more are taking the CFP(T) exam. They just don’t seem to be at the helm of the Big Boy firms. Isn’t it enough that there are more women out their giving financial advice? Does it even matter who runs the Big Boys?
Why size matters
These increasingly massive firms, overwhelmingly led by men, are not just offering financial advice, they are taking over the industry. Scale does not just buy clients. It buys the most important seats at the legislative and financial industry tables. For instance, LPL Financial, at the top of Barron’s mega tier, spent $1.65 million on federal lobbying in 2024 and employs a dozen federal lobbyists, nine of whom previously held government jobs. The Big Boys get to lead the direction our whole industry goes into the future. With so much new, exciting/terrifying technology and change on the horizon, the people at the helm of this ship have a lot of power and responsibility. So while the smaller firms focus on client service, the Big Boys are dictating the rules for our industry.
The Big Boys continue to consolidate, gobbling up the little guys and girls, almost entirely through private equity funding. Indeed, the title of Barron’s for this very publication was, “How Private Equity Is Changing Wealth Management.” Mercer Capital, which values these firms for a living, puts it plainly: “private-equity-backed platforms frequently pay higher multiples than internal purchasers can match, because they extract synergies and borrow more cheaply.” A junior advisor with nothing more than her savings and a bank loan can rarely compete with a private equity backed buyer with virtually unlimited capital behind it. Indeed, only 22% of firms believe their internal successors can afford to buy out the founders, down from 38% four years ago. That leaves them with little choice but to sell to a bigger fish. That is, the Top Guys currently at the top of Barron’s List.
So maybe now you can find a variety of female led, small RIAs. But once this new crop of female advisors look to their own retirements, they will likely be forced to sell, to receive a meaningful sum of money, to one of these overwhelmingly male-led firms at the “top” of Barron’s list.
I have a sad premonition that as these firms keep gobbling up the smaller, more diversely led ones, we will further stifle the voice of female and other diverse indepdnent financial advisors. Yes, more women may be providing direct independent financial advice, but even fewer will be leading the firms that have voices in shaping the industry.
A smaller practice financial advisor deserves to retire to the Viking Cruise ship of her dreams, just like her clients, after all. So who am I to say she shouldn’t accept the biggest payout for her life’s work she can get? Even if it means rolling her firm into a private-equity backed Mega? I don’t think the onus should lay with the individual advisor.
How to Halt the Hoarding
About 37% of financial advisors, who control $10.4 trillion, or 40% of total industry assets, will retire within the next decade. That is the largest transfer of ownership this profession will ever see, and at the moment the only bidders with real money are private equity platforms. The FPA partnered with FP Transitions a decade ago to give members knowledge and resources on succession. But education was never the problem. Capital is.
Commonwealth, a broker-dealer, built a program with three loan structures and equity financing specifically so its advisors could fund succession without going to an outside lender. Perhaps the Financial Planning Association could build a similar program to provide pooled succession lending, standardized internal-buyout terms, and loan guarantees to make banks comfortable lending against an advisor’s book of business and loyal client list. The organization that spends years recruiting women and then hands every one of their firms to the same nine buyers has not accomplished any lasting change. The FPA should be as focused on funding women advisors’ exits as on getting them in the door.
What can you do as a client?
Ask your advisor who owns her firm and about her succession plan. The hoard is not going to stop growing because I wrote about it. But every household that deliberately opts to work with someone not on the Top Hoarder list, looks for an independent investment advisor, is one that did not end up under that pile of yellow newspaper.
Comments